Are SEO Companies in Trouble?

I was just turned on to an article by DM News entitled Troubled times for SEO firms by Lee Odden at Top Rank Online Marketing. The article cites a report from MarketingSherpa that says, amongst other things, that revenue for SEO firms fell from 124% growth between 2004-2005 to just 6.7% between 2005-2006. It then goes on to give a few reasons why this may have happened.

I agree with 50-75% of each conclusion, but 25-50% of each conclusion is based on what I believe to be misunderstandings about what SEO is.

1. “SEO Isn’t Rocket Science” – I know quite a few people who would beg to differ. True, if you’re already web-savvy it isn’t all that hard to learn, but to become an SEO expert you’ll need to know how to at least edit the HTML code of your website, and for many of our clients that already puts SEO on a level of complexity they don’t want to deal with. I’m always telling clients they could learn how to do SEO themselves, and they keep telling me they don’t want to and that they’d rather pay us to do it.

2. “SEO is a ‘Fix-it-Once’ Task, not an Ongoing Service” – I think the author is way off on this one and I’m stumped as to what evidence he has to support this claim. This conclusion may be true if your website remains static, is less than 50 pages, and has virtually no competition. The author says that search engines don’t change the algorithm by which they rank pages very often, which is true, but then the author makes an assumption that the only reason why a website needs to be updated for SEO purposes is when the algorithm changes.

The algorithm is not what makes SEO an ongoing service. SEO is ongoing service because it is impossible to make changes once and see your site go to the #1 spot on every search engine for every keyword you want it to rank. This takes time, research, and a lot of trial and error. SEO is ongoing because your competitors are changing what they are doing, and SEO is inherently a game of relativity. You don’t have to be perfect, you just have to do SEO better than the next guy. But if he pulls ahead then you have to do more SEO to figure out how to leapfrog him. SEO is ongoing because companies change the products and services they offer, or potential customers change the keywords they use to find the same services. Yes, in some cases it can be a one-time affair, but those cases are part of a small minority.

3. Marketers are becoming wary of unethical SEO companies – Yes, there are a lot of SEO firms that are lacking in ethics, and this is probably the most valid claim the author makes.

However, I don’t believe that it, nor any of the other conclusions he makes, are the reason for the slowdown in revenues for SEO firms. First, bear in mind that SEO companies didn’t make less money than last year, they just didn’t double revenues. Or in other words, they aren’t accelerating as fast, but that doesn’t mean they’re slowing down.

Second, there are a lot of other factors at play. The general economy is likely the largest culprit, but the study itself may be flawed. Companies in web related industries can come and go on a whim, and so the survey sample would need to be quite large to be truly representative.

Are SEO companies in trouble? They may be, I’m just not ready to swallow the author’s conclusions as to why.